Unequal Economic Growth Between Regions in Indonesia: Hard Infrastructure or Soft Infrastructure?

Christian Jeremy Siahaan, Mohammad Kemal Taufiqurahman, Barata Andrianto and Muhammad Nur Iman
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Christian Jeremy Siahaan: Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia
Mohammad Kemal Taufiqurahman: Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia
Barata Andrianto: Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia
Muhammad Nur Iman: Development Economics Program, Economic Bachelors, Universitas Katolik Parahyangan, Bandung, Indonesia

International Journal of Business and Administrative Studies, 2020, vol. 6, issue 2, 97-110

Abstract: Infrastructure is one of the inputs that could affect the growth of a region. The difference in infrastructure development between regions is an obstacle for Indonesia in the rise of economic growth, which will be directly proportional to the increase of inequality between regions. In this study, infrastructure is divided into 2: hard infrastructures, where there are electrification variables, access to water and road access, and soft infrastructure, explained through variables of life expectancy, literacy rates, and school enrolment rates. This study is conducted using the Ordinary Least Square analysis techniques to explain the growth-inequality between regions using the Williamson Index. Principal Component Analysis (PCA) is applied in this study to define hard infrastructure variables and soft infrastructure. The results of this study show that the development of hard infrastructure and soft infrastructure in various regions in Indonesia has reduced the number of inequality in various regions in Indonesia.

Keywords: Inequality; hard infrastructure; soft infrastructure; economic growth (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:apa:ijbaas:2020:p:97-110

DOI: 10.20469/ijbas.6.10004-2

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